KUALA LUMPUR Oct 18 Top Glove Corp Bhd
, the world's largest rubber glove maker, is looking at
deals of up to 1 billion ringgit ($240.7 million) as it seeks to
expand its business through acquisitions of local players.
The Malaysian manufacturer accounts for about one-fourth of
global rubber glove production, with a manufacturing capacity of
46.6 billion pieces per year. Listed in Malaysia and Singapore,
the group operates from Malaysia, Thailand and China.
The group is in negotiations with a few local players
regarding valuation, said Top Glove Executive Director Lim
Cheong Guan, adding that he expected it could come down amid
macroeconomic headwinds. He, however, declined to name the
"The deal size could be up to 1 billion ringgit," he told
Reuters on the sidelines of a press conference. "We are looking
at niche private players... These could be specialised glove
He said the group was "in no hurry" seal a deal, although it
had previously targeted to clinch it within this year.
The group believes an industry consolidation is on the
horizon which will work in its favour to expand through
Chairman Lim Wee Chai said at the conference that the group
was cautious about valuation.
"In the United States and Europe, where mergers and
acquisitions are common, companies are willing to pay three to
four times the price-to-book value. They can compete. Our
acquisition must be done smartly, or we would not be able to
compete efficiently," he said.
The group remains committed to organic growth by building
factory capacity using the best technologies, he added.
Top Glove is in the process of ramping up capacity in
Thailand and locally, in tandem with growing global demand for
gloves. By April 2017, the group said it would have a production
capacity of 52.4 billion pieces.
The company reported a 36.2 percent drop in its
fourth-quarter net profit, and targets a 30 percent global
market share by 2020.
($1 = 4.1550 ringgit)
(Reporting by Liz Lee; Editing by Subhranshu Sahu)